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Thursday, April 23, 2009

Horizon Towers - Failed Deal Gets Owners $1.5m

Source : The Straits Times, April 22, 2009

HORIZON Towers owners may reap some $1.5 million from a failed en-bloc deal which in turn could help pay their legal bills.

HORIZON Towers owners may reap some $1.5 million from a failed en-bloc deal which in turn could help pay their legal bills. --PHOTO: ST

The sum represents the interest earned on the $50 million deposit paid by the would-be buyers when the $500 million deal was inked in 2007.

The deposit was paid when the initial option to purchase and sales pacts were signed. The deal was made between the condominium's sales committee on behalf of the majority owners, and property developer HPL and two partners.

The en-bloc deal derailed early this month after a handful of objectors fought all the way to the Court of Appeal, which ruled for them. The $50 million deposit is understood to have been returned to the would-be buyers. But the deal provided for the interest to be given to the sellers, probably including the minority objectors. Not all contracts spell out how to deal with the interest earned on the 10 per cent deposit from the option to purchase and sales agreements, which in this case was substantial, said lawyers.

But today's sales-savvy sellers are likely to insist the interest goes to them if a sales bid falls through, said lawyer Philip Fong. In disbursing the money, the sales committee would have to include the minority objectors, as the the Court of Appeal decision made clear the sale contract applied to all owners, said Mr Fong, a partner of Harry Elias Partnership.

It is not clear how far $1.5 million will offset legal costs, which have not been totalled up. Horizon Tower sales committee member Mamata Kapildave Dave, 40, said yesterday no decision had been made yet on how the 210 owners would deal with the $1.5 million while the court assesses legal fees.

The total costs in the long-standing case would include lawyers' fees for the initial 17-day Strata Titles Board hearings, two High Court appearances and the final Court of Appeal session.

A total of 173 majority owners have already paid some $2.6 million, or $15,000 each, while a group of three minority owners are reported to have coughed up some $1.5 million in lawyers' fees.

Meanwhile, lawyers from Allen & Gledhill, representing the failed buyers, are going to court today about a suit that has been brought against the sales committee. The suit was filed in 2007 and sought a declaration that the sales committee had allegedly not done all it could to make sure the sale went through.

According to court documents filed, the suit also sought damages for alleged breach of contract. It has been in abeyance since February, pending the outcome of the Court of Appeal's judgment, which was delivered earlier this month.

'They can either go ahead with the suit, amend the suit or drop it altogether,' said Ms Mamata.

'We are on the horizon, and there is sunrise and there is sunset.We hope in good faith everything goes right.'